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Hungryroot targets the "profitable" delivery dilemma

Illustration of a bag of groceries surrounded by shapes and zoomed in sections of a dollar bill.

Illustration: Gabriella Turrisi/Axios

Hungryroot, which describes itself as an AI-powered "personal" grocer, thinks it may have figured out how to sell food online and deliver it profitably.

How it works: With Hungryroot's inverted model, the shopper begins with a cart full of items and recipes chosen by an algorithm based on a person's health goals. The customer can then add and subtract items as they see fit.

Between the lines: "We're not a traditional grocery service. We're not a meal kit. We’re taking the both of best worlds and providing groceries as well as recipes," says CFO Wajeeha Ahmed. And Hungryroot is doing it in a way that is mindful of the customer's health goals, she tells Axios.

By the numbers: Hungryroot has raised $75 million in backing to date, including $40 million from PE firm L Catterton last year. Revenue grew 142% in 2021 and 35% in the first quarter.

  • Those proceeds were invested in technology, hiring, increasing its marketing efforts and building the infrastructure to support that growth, such as opening a new fulfillment center in New Jersey.

Yes, and: To rein in costs, the startup has "never been in the business of get your tub of ice cream, because you're having a craving, in 15 minutes," Ahmed explains. "One thing I feel very proud about is … our ability to operate in an environment where inflation is all around us," she adds.

What's next: For now, the weekly subscription service is focused on organic growth by expanding its offerings and focusing on lunch in addition to dinner as more people work from home. The aim is to become a one-stop-shop for all of a customer's grocery needs, Ahmed says.

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